Nonprofit Capital Campaigns: A Guide for Fundraisers

When we think about nonprofit organizations, we think about low overhead, shoestring budgets, and underpaid staff. However, organizations sometimes need an uncharacteristically large amount of money to take their work to the next level. 

Whether you’re trying to build a fitness center, buy expensive medical equipment, or double your endowment, a nonprofit capital campaign can help you achieve your goal. However, you need the right skills, plan, and data analysis techniques to execute a successful capital campaign. 

This article explores everything you need to get started on your next capital campaign:

What Is A Capital Campaign?

A capital campaign is a targeted fundraising effort intended to support a large nonprofit project. These campaigns typically have sizeable budgets and can take years to complete. 

For example, The University of Maryland (UMD) recently announced that it successfully concluded its $1.5 billion capital campaign. This campaign had over 117,000 contributors and took about three years to complete!

While most campaigns won’t be nearly as big as UMD’s, this example demonstrates how massive and transformative capital campaigns can be. Nonprofit capital campaigns can fund a variety of projects:

• Buildings and additions 
• Land purchases
• Renovations
• Expensive equipment
• Program expansions 
• Programs development
• Endowments 
• Program staff salaries

Essentially, capital campaigns can support anything that would significantly improve your organization’s impact.

Discover How Much Your Next Capital Campaign Will Raise

How To Plan A Capital Campaign

To set yourself up for success, you need to take your time in the planning phase of your campaign. Here are five steps to consider when creating your nonprofit capital campaign plan:

1. Align with your mission

While developing your campaign’s case for support, make sure your campaign’s congruent with your nonprofit’s mission. To do this, ask yourself the following questions: 

• Does this project improve our ability to serve our community? 
• Why is this project the best opportunity to pursue our mission? 
• Will this project disrupt any of our current programs and services? 
• Will internal and external stakeholders think this is a worthwhile project?

The more you interrogate how your capital campaign will advance your mission, the more it will engage your stakeholders and provide value to your organization.

2. Craft a fundraising strategy

There are typically two parts of a capital campaign fundraising strategy: the quiet and public phases.

The quiet phase of a capital campaign is centered around soliciting major gifts before announcing the campaign publicly. These initial gifts will allow you to feel confident that you’ll reach your goal, as major donors will likely provide the majority of the campaign’s support. In fact, you shouldn’t conclude your quiet phase until 50-70% of your goal has been raised. 

Additionally, having the support of major donors will motivate other community members to donate. Major donors provide credibility to your campaign, and donors, who are lower on your donor pyramid, will be more likely to contribute to a campaign if they’re confident it’ll succeed. 

So, make sure the first step of your fundraising strategy is identifying donors, corporations, and foundations who can provide a gift that would start you off with a bang. 

Once you’ve secured enough major gifts, you can enter the public phase. During this phase, you’ll publicize your campaign and solicit a high volume of smaller donations. This phase is crucial to reaching your fundraising goal and getting your community involved in the project. 

You should have an event to kick off the public phase of your campaign. This event will educate your stakeholders on the campaign and motivate them to contribute. Throughout your public phase, use various fundraising techniques and invest in nonprofit marketing tactics that target ideal donors and prospects.

3. Set a budget

Your nonprofit capital campaign will likely be your most expensive fundraising effort because it requires an immense amount of planning, marketing, and programming. Here are some elements to keep in mind when creating your campaign budget:

• Staff time
• Fundraising event costs  
• Digital ads
• Transaction Fees
• Mail campaigns
• Prospect research
• Consultations
• Stewardship efforts
  

Also, factor the cost of your campaign into your overall goal. Doing so will prevent you from having to divert funding from any other budgets, and the campaign can pay for itself.

4. Establish a timeline

Deciding the amount of money you need to raise may be a simple calculation. However, it can be much more challenging to develop a timeline for your capital campaign. 

Your timeline will depend on the success of your quiet phase. If your major donors get you 65% of the way towards your goal, you can calculate how long it would take other donors to contribute the remaining 35%. You can perform this calculation by looking at your average donation amounts from the same months or periods in previous years. 

Also, consider setting the end date of your campaign on a day of significance for your organization. For example, Giving Tuesday is a good time for many nonprofits to end a campaign. On a day dedicated to celebrating generosity, you can get one last push to help you reach your goal. 

Last, don’t forget to have a communications plan in place for your capital campaigns. You can take advantage of nonprofit marketing automation tools to schedule communications in advance and keep donors in the loop throughout the public phase of your campaign.

5 Capital Campaigns Best Practices

Although there are infinite ways to run a capital campaign, the best practices shared below can optimize any campaign.

1. Maximize your major donors

Leveraging your relationships with major donors is key to your capital campaign’s success. You need to motivate your major donors appropriately and maximize the value of their gifts.

One way to motivate your donors is by offering them the recognition they deserve. For a capital campaign, naming rights to the program or building being developed may be appropriate for your largest donor. For example, in many hospitals and universities, it’s common for buildings or wings to be named after the donors that helped build them.

For other major donors, you could give them a plaque, feature them on a “donor wall of fame,” or announce their gift at an event or in your newsletter. 

Additionally, you should use major gifts to motivate other donors. To do so, set up a matching campaign with your major donors. A study found that donor contributions increase by 16% when they know their donation will be matched. So, speak with your major donors to learn how they want to be recognized and if they are interested in launching a matching gift campaign.

2. Maintain consistent communication

All stakeholders should feel like they’re a valued part of your capital campaign. The best way to do this is by maintaining a steady stream of communication. 

Your major donors will require the most personalized and frequent communication. So, you should update them on significant events and ask for feedback when appropriate. 

For other contacts, be sure to send regularly scheduled campaign updates. You can do this by  automating your communications. Additionally, you can segment your contacts by donation amount or interest area in order to send the most appropriately worded message.

Don’t forget to send a thank you message upon the completion of your capital campaign.

3. Run a feasibility study

To test the viability of your campaign, you should conduct a campaign feasibility study. 

A feasibility study is the process of asking for your stakeholders’ opinions on your future campaign. Suggestions by major donors, staff members, beneficiaries, community leaders, and board members can give you a better, holistic understanding of whether or not your capital campaign is realistic. 

Check out Capital Campaign Toolkit’s list of feasibility questions to develop a standardized line of inquiry for your stakeholders.

4. Get the right software

With hundreds of moving parts in your nonprofit capital campaign implementation process, you’ll need a campaign management system. It’s crucial to find a nonprofit CRM that can manage campaigns, process donations, and automate communications. These features will allow you to spend less time performing administrative duties and more time talking to donors. 

Check out the CRMs below to get started with campaign management:

Raiser’s Edge NXT by Blackbaud: If you’re from a large nonprofit with a robust technology team, Raiser’s Edge may be the CRM for you! It’s perfect for organizations with more than 75,000 contacts in their database.

Keela: This is the best nonprofit CRM for small-to-mid-sized organizations and teams with serious growth aspirations.

Neon CRM: This software is best for small nonprofits with complex membership or event management needs.

5. Find grant opportunities

Part of your campaign’s quiet phase should be dedicated to pitching your project to grant-giving entities. Having the support of a nonprofit foundation, corporate foundation, or governmental body can be equal to receiving several major gifts. 

To identify, apply for and manage grants with ease, you have to find the right software. Check out Candid’s Grants Plus or Good Grants for grant management solutions. For Canadian nonprofits, Grant Connect provides a more detailed list of grantors in the great white north.

A capital campaign is one of the most significant projects a nonprofit can undertake. It’s not only an opportunity to further your mission, but it will bring your community closer together. So, use the tips and tricks in this article to start your organization on its next journey!